OSLO, Norway (Reuters) -- The future of Norway's state alcohol monopoly, which charges sky-high prices that make drinkers grumble, has become a political headache for the Labor Party government as it eases the nation toward free trade in Europe.

Voters of the tiny but influential Christian Democratic Party are appalled by the threat of cheap alcohol after the European Free Trade Association and the European Community join up in a vast free market Jan. 1, 1993.

And the Christian Democrats have enough swing votes in parliament to keep EFTA-member Norway out of the so-called European Economic Area (EEA).

After months of trumpeting the virtues of free trade in the 19-nation EEA, the Labor government is stressing that it expects an exception for alcohol -- partly to encourage the Christian Democrats to vote for the EEA.

Alcohol in Norway has always been political dynamite. Of only five referendums held since the country's independence from Sweden in 1905, two have dealt with the issue.

Buying alcoholic beverages can be clinical and costly.

The state "Vinmonopolet" has a monopoly on imports and sales of all alcohol stronger than beer. It charges astronomical prices -- its cheapest bottle of Scotch costs just more than $40 and the cheapest wine is about $7.50.

Vinmonopolet shops have only limited hours of business and cannot advertise, and bottles must be sold over the counter as in a pharmacy.

A right-wing Norwegian legislator wants to change all that and open a liquor store with a twist in downtown Oslo in 1993, arguing the state-run shops will be outlawed under EEA.

"The Vinmonopolet will have to go," said Fridtjof Frank Gundersen, a Bergen University law professor and member of parliament for the right-wing Progress Party.

"In my shop, people will be able to touch the bottles and we'll have free tastings, with a different country or vintage every week," he said.

Norwegians are among the most abstemious people in the world. A powerful temperance movement sees alcohol at the root of many illnesses, violent crime and immorality.

"It is important for us to keep the Vinmonopolet," said Kjell Magne Bondevik, a teetotal Lutheran priest who leads the Christian Democrats. He estimated that 10 percent of Norwegians don't drink.

Labor says that Norway's tradition of using the Vinmonopolet as a key to its health and social policy overrides the demands of free trade in a wider Europe.

But opponents of the monopoly say the Vinmonopolet's high prices foster booming smuggling and moonshine businesses.

The Vinmonopolet estimates it sells only about half the hard liquor consumed in Norway. On the black market, a bottle of smuggled Scotch costs $28.50.

The Christian Democrats will decide in the coming weeks whether to try to block approval of the EEA by the Norwegian Parliament. Three-quarters of the legislature's 165 members must vote in favor of the treaty if it is to be ratified.

If the Christian Democrats' 14 members join the 28 parliamentarians of two anti-EC parties who have said they will vote against the EEA, the measure will not pass.

Meanwhile, newspapers have run articles debating the meaning of key articles of the EC's founding Treaty of Rome dealing with free trade and state monopolies. Article 37 says state monopolies must be "adjusted" but does not bar them.

But Mr. Gundersen said that the European Court of Justice, in a 1976 ruling against an Italian state tobacco-importing monopoly, laid down a principle that trading monopolies should be abolished to avoid discrimination against other nations.